Understanding the Open Payments Program
What the Sunshine Act requires, how CMS collects payment data, and what types of transfers pharmaceutical and device companies must disclose.
Key Takeaway
The Open Payments program requires pharmaceutical and medical device companies to publicly disclose every payment made to a physician or teaching hospital — from a $12 lunch to a $500,000 research grant. In PY2024, over 6,000 companies reported $13.3 billion in payments. The goal: informed patients and transparent healthcare relationships.
The Physician Payments Sunshine Act
The Physician Payments Sunshine Act — officially Section 6002 of the Affordable Care Act — was signed into law in 2010 and took effect in 2013. The law was a direct response to growing evidence that undisclosed financial relationships between drug companies and physicians were influencing prescribing behavior and patient care, often without patients' knowledge.
Before the Sunshine Act, payment disclosure was largely voluntary or limited to settlements from fraud investigations. A handful of states had enacted their own disclosure laws, creating a patchwork of requirements that large national companies struggled to navigate consistently. The Sunshine Act replaced this fragmentation with a single federal standard covering all manufacturers of CMS-reimbursable products.
Congress named the law after Supreme Court Justice Louis Brandeis's famous observation that "sunlight is said to be the best of disinfectants." The underlying theory: when financial relationships are public, both physicians and companies are more likely to act appropriately — and patients can make more informed decisions about their care.
Who Must Report
The reporting obligation falls on applicable manufacturers — any company that produces a drug, biologic, device, or medical supply that is covered by Medicare, Medicaid, or CHIP and that is available for purchase in the United States. This includes:
- Pharmaceutical manufacturers (brand-name and generic drug makers)
- Biologic and vaccine manufacturers
- Medical device and equipment companies
- Group purchasing organizations (GPOs) with ownership interests
Foreign companies that sell covered products in the US are also subject to reporting requirements. In PY2024, over 6,000 distinct companies submitted data to CMS. Browse all reporting companies on PlainPharmaWatch.
What Types of Payments Are Reported
CMS defines over a dozen categories of reportable transfers of value. Some are large and obvious; others are surprisingly small. The reporting threshold is just $10 per individual payment (or $100 aggregate per year per recipient). Major categories include:
| Category | Description |
|---|---|
| Research | Payments for clinical trials, study participation, or research agreements between a company and a physician or institution. |
| Consulting | Fees paid to physicians for advisory services, product feedback, or strategic consulting roles. |
| Speaking / Education | Honoraria for speaking at company-sponsored events, continuing medical education programs, or product presentations. |
| Food & Beverage | Meals, snacks, and drinks provided during promotional events, office visits, or meetings. |
| Travel & Lodging | Transportation, hotel stays, and associated expenses paid on behalf of physicians attending company events. |
| Royalties & Licenses | Payments for use of a physician's intellectual property — inventions, patents, or licensed materials. |
| Ownership Interests | Stock, equity, or other ownership stakes held by physicians in applicable manufacturers. |
Explore the full breakdown of payment categories on the payment types page.
How CMS Collects and Publishes the Data
Companies submit payment records electronically through the CMS Open Payments portal each year, covering all transactions from the prior calendar year. The submission window typically closes in the spring. Before data is published, physicians and teaching hospitals have a 45-day window to review their records and flag disputes. CMS does not independently audit every record but does perform automated validation checks for completeness and consistency.
Once published, the data is freely available on the CMS Open Payments website and through the CMS data API. PlainPharmaWatch ingests this data and makes it searchable by company, state, and payment type, with summary statistics and rankings.
Reporting Thresholds and Transparency Tiers
Per-payment and per-recipient floors
CMS sets a ten-dollar per-payment minimum and a one-hundred-dollar aggregate-per-year-per-recipient floor. Below those values a single transfer can go unreported, but once a recipient crosses the annual aggregate threshold in cumulative transfers from one company, every payment that year — including the small ones — must be disclosed.
General payments vs. research payments
Open Payments separates "general" payments (consulting, meals, travel, speaking) from "research" payments (clinical-trial work, study payments). Research payments are reported separately because the $$ values per record can be much larger and the relationship is contractual rather than promotional.
Ownership and investment interests
A separate disclosure category covers any direct or indirect equity, stock options, or partnership interests held by a physician (or immediate family) in an applicable manufacturer or GPO. Reported value is the dollar amount of the interest, not just transfers — distinct from general or research payments.
Indirect payments and intermediaries
When a manufacturer pays a third party (an agency, foundation, or CME provider) and the third party then pays a physician, the manufacturer is still required to disclose the payment if the manufacturer "requires, instructs, directs, or otherwise causes" the third party to do so. This catches sponsored speakers' bureaus and many CME arrangements.
| Tier | Threshold | Reporting cadence |
|---|---|---|
| Single payment | ≥ $10 | Reported individually |
| Aggregate per recipient | ≥ one hundred dollars / year | All payments reported once threshold reached |
| Research grant | No floor | Always reported separately |
| Ownership | Any equity | Annual disclosure |
Worked example: aggregating a year of small meals
Suppose a physician receives twelve $$15 lunches from one company across the calendar year, each individually below the ten-dollar floor for some other categories but above the floor here. Aggregate: $$180. Because cumulative payments from that company exceed the annual aggregate threshold, every meal — even ones at $$12 or $$15 — must be disclosed individually. In our database that surfaces as 12 separate Food & Beverage records totaling $$180, and the company's PY summary picks them all up.
"The Sunshine Act is not an accusation — it is an inventory. Reading the data well requires separating relationship type, frequency, and dollar magnitude before drawing any conclusion."
Limitations of the Data
Open Payments data is comprehensive but has important limitations to understand:
- Not all providers are covered. Nurse practitioners, pharmacists, and physician assistants are not included in the standard reporting dataset (though CMS has expanded coverage in recent years).
- Reporting errors exist. Some records contain duplicate entries, incorrect physician identifiers, or misclassified payment types. CMS publishes corrections in subsequent releases.
- Context is not provided. The data shows what was paid but not why, or whether the relationship was clinically appropriate. A large research payment does not indicate wrongdoing.
- Not retroactive. Data is only available from 2013 forward. Historical relationships before the Sunshine Act are not captured.
Frequently Asked Questions
What is the Open Payments program?
Open Payments is a federal transparency program managed by the Centers for Medicare & Medicaid Services (CMS). It requires pharmaceutical manufacturers, medical device companies, and group purchasing organizations to publicly report all payments and transfers of value made to physicians and teaching hospitals. The program was established by the Physician Payments Sunshine Act (Section 6002 of the Affordable Care Act) and data has been published annually since 2013.
Who is required to report payments under the Sunshine Act?
Applicable manufacturers — companies that produce drugs, biologics, devices, or medical supplies covered by Medicare, Medicaid, or the Children's Health Insurance Program (CHIP) — must report. Group purchasing organizations (GPOs) must also report ownership and investment interests. Companies with under $10,000 total payments to a single physician in a given year may have different reporting thresholds for some categories.
What types of payments must be reported?
Reported transfers of value include consulting fees, speaking fees, honoraria, research grants, food and beverages, travel and lodging, education, gifts, charitable contributions, royalties and licenses, current or prospective ownership or investment interests, and any other payments not captured by other categories. Each payment record includes the recipient, payer, amount, date, payment category, and — when applicable — the specific drug or device associated with the payment.
How does CMS collect and verify the data?
Companies submit their payment data electronically to CMS each year, covering payments made in the prior calendar year. Physicians have a 45-day review and dispute period before data is published. CMS performs data validation checks but does not independently audit every record. Companies must attest to the accuracy of their submissions. Errors discovered after publication can be corrected in subsequent data releases.
What is a "Program Year" in Open Payments?
A Program Year (PY) refers to the calendar year in which payments were made. PY2024 data covers payments made between January 1 and December 31, 2024. CMS typically publishes data for a given program year in the following year — PY2024 data becomes publicly available in 2025. PlainPharmaWatch uses the most recent published program year.
Are all payments to doctors reported in Open Payments?
Open Payments covers payments from applicable manufacturers and GPOs to physicians (MDs, DOs, dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals. It does not capture payments to nurses, pharmacists, or other healthcare professionals who are not physicians, nor does it include payments from companies not covered by Medicare or Medicaid. Research payments to institutions (rather than individual physicians) may be reported differently.
Sources
- Centers for Medicare & Medicaid Services — Open Payments Program Year 2024
- Affordable Care Act, Section 6002 — Physician Payments Sunshine Act (2010)
- CMS Open Payments Data Dictionary and Methodology Report
This content is for informational purposes only and does not constitute medical or legal advice. Reported payments do not imply wrongdoing or inappropriate conduct. Many physician-industry relationships are lawful and clinically beneficial. Always consult your healthcare provider for medical decisions.
Understanding the Data
The information presented throughout this guide is informed by publicly available public records published by federal and state government agencies. Our database aggregates and standardizes these records to make them more accessible and easier to interpret for general audiences. When we reference specific statistics or trends, they are drawn directly from these authoritative sources unless explicitly noted otherwise.
It is important to understand the limitations of any large-scale data dataset. Records may contain errors from the original data collection process, some fields may be incomplete for older entries, and classification systems may have changed over time. Our analysis accounts for these factors by clearly labeling data vintage, flagging records with missing critical fields, and noting when temporal comparisons span methodology changes in the source data.
For readers who want to conduct their own research, we recommend going directly to the source whenever possible. federal and state government agencies provides detailed documentation on collection methodology, sampling frames, and known data quality issues. Our goal is not to replace primary sources but to make them more approachable and to highlight patterns that may not be immediately obvious when browsing raw records.
How We Analyze Data Records
Our analytical approach involves several steps designed to surface meaningful insights from large datasets. First, we clean and standardize the raw data, handling variations in naming conventions, date formats, and categorical labels. Then we compute summary statistics, distributions, and comparative benchmarks across relevant dimensions such as geography, time period, and category type.
Key metrics we examine include statistical records, geographic distributions, temporal trends. These indicators provide a multi-dimensional view of each entity in our database, allowing users to understand not just individual records but how they compare to peers, regional averages, and national benchmarks. We believe this contextual approach is far more valuable than presenting raw numbers in isolation.
